Medical Bills: The Cost of the Final Five Years

By Matthew Heimer

Seniors and their families always face a reality check when they realize how much Medicare doesn’t cover—from necessary sundries like your drug-store “cheater” reading glasses to major costs like nursing-home care. A new study in the Journal of General Internal Medicine focuses on out-of-pocket spending in the final five years of a Medicare recipient’s life, and generates some sobering details where that’s concerned. According to a review of the report by the Wall Street Journal’s Glenn Ruffenach, about one household in ten will spend $100,000 – again, that’s just out-of-pocket, not the total bill – over those five years.

Many retirees, of course, don’t have $100,000 to spend by the time they reach that stage. Which leads to another unsettling finding: According to a summary of the study, a quarter of the Medicare recipients in the study “spent more than their total household assets on healthcare” (emphasis mine). Behind that number, undoubtedly, are sandwich-generation boomers making some difficult decisions as they try to help their parents.

Story Conversation

About Encore

Encore looks at the changing nature of retirement, from new rules and guidelines for financial security to the shifting identities, needs and priorities of people saving for and living in retirement. Our lead blogger is editor Matthew Heimer, and frequent contributors include editor Amy Hoak, writer Catey Hill, and MarketWatch columnists Elizabeth O’Brien, Robert Powell and Andrea Coombes. Encore also features regular commentary from The Wall Street Journal retirement columnists Glenn Ruffenach and Anne Tergesen and the Director of the Center for Retirement Research at Boston College, Alicia H. Munnell.